Matthew Sinclair-The NonProfit Times

Monday, April 15, 2002

By Matthew Sinclair
It was the best of jobs. It was the worst of jobs. Major gifts officers are posting salary gains of 6.8 percent on average for 2002. But with the economic slowdown of 2001 moving into an economically and politically tumultuous era, some organizations have begun to consider whether they can afford to keep major gifts officers or are including those responsibilities with those of planned giving officers.
And, if you're the top dog at a nonprofit, don't expect too much of a pay hike in 2002.
Leaders of nonprofits and those holding directorial titles are finding the economic slowdown translating to static salary increases in many areas, with increases roughly between 3 and 4 percent overall.
The annual The NonProfit Times salary survey was sent to 3,000 organizations in late October. Responses were compiled and tabulated with the assistance of researchers of the Center For Public Service at Seton Hall University in South Orange, N.J.
The survey sought information on 10 positions: executive director/CEO/president; chief financial officer; program director; planned giving officer; development director; major gifts officer; chief of direct marketing; director of volunteers; Webmaster; and chief of technology. The two technology-related job titles were new this year.
Though all 10 categories reported increases from 2001 to 2002, four were less than 1 percent growth.
The national average projected pay for 2002 for the 10 positions are:
Executive director/CEO/president -- $90,903
Chief Financial Officer -- $61,518
Program Director -- $53,782
Planned Giving Officer -- $58,753
Development Director -- $57,312
Major Gifts Officer -- $62,951
Chief of Direct Marketing -- $53,011
Director of Volunteers -- $35,349
Webmaster -- $45,165
Chief of Technology -- $58,699
Top association executives posted an average $120,044 salary, the largest salary among the organization-type categories. Foundation executives posted more than $107,000 in average salary. Social/welfare organizations, the largest group of respondents, showed a falling average salary, dropping just under $84,000 for their top executives - down from an average of $84,775 reported in this year's survey for 2001.
This year the other top average salaries among chief executives included:
Association -- $120,044
Foundation -- $107,145
Religion -- $104,085
Cultural -- $95,828
Education -- $95,514
Health -- $93,983
Social/Welfare -- $83,901
Civic -- $65,246
Government -- $61,125
The top spot showed modest growth, increasing 3.3 percent over the reported salaries of 2001. CEOs across the board showed a mean salary of $90,903 for 2002. That figure was $87,986 in 2001 for the surveys reported this year.
When it comes to executive salaries, organizational size still matters most, with the top spot at the largest organizations ($50 million-plus) reporting an average of just under $218,000. Those executives at organizations raising less than $1 million posted an average of less than $59,300.
And though the salary difference among geographic locations was far less dramatic than for organizational size, executive directors in the mid-Atlantic region (which includes New York City and Washington, D.C.) averaged almost $98,500. CEOs in the central region of the nation averaged $76,212. Many positions showed barely any salary growth between 2001 and 2002.
Major gifts officers showed the only major increase, with mean salaries rising just under 7 percent in 2002 compared to the previous year, reaching nearly $63,000, up from just under $59,000.
Program directors in New England were the country's best paid on average, earning $57,505. The southwest tended to be at the low pay range for program directors at $40,841.
Webmasters, in the first reporting of their salary data in the NPT Salary Survey, showed a mean salary of $45,165 overall - up 4 percent from the $43,428 reported for 2001. The other technology-related newcomer to the survey, chief of technology, showed an increase of less than $200 - barely a blip in terms of growth, and less than inflation.
The only other positions that showed an increase of more than 1 percent were direct marketing chief, development director and chief financial officers. The DMers saw a 1.9 percent rise in pay to inch over $53,000 per annum, while CFOs' pay increased to $61,518.
Organizations reported their average staff pay increases were slightly less this year than they were last year. In 2002, the average pay increase was 3.65 percent across the board, while the average in 2001 was 4.14 percent. The highest response for staff pay increases in 2002 was 10 percent, while the highest in 2001 was 15 percent.
Looking forward, organizations tended to see 2003 like 2002, with the highest increase reported at 10 percent and the average rolling in at 3.67 percent.
As in past years, a strong percentage of organizations reported they did not pay performance-related bonuses. This year 80 percent surveyed did not pay such bonuses, while 19.3 percent did make bonuses based on performance.
Of those that did, most often the position receiving the bonus was the chief executive, who averaged $10,745 in bonuses. Development directors, program directors, and chief financial officers were the next highest recipients of bonuses, with bonuses of 5.5 percent to 6.8 percent of their salaries. Some technology chiefs also saw bonuses go their way, at an average of $990.
Whether an organization would consider offering one-time bonuses to candidates, however, found mixed results. Most respondents said they did not know, registering 43.5 percent. Only 15.3 percent said they would consider offering a one-time bonus to the right candidate.
As in past years, only one-third of nonprofits reported they provided their top executives employment contracts. Predictably, the most common executive to hold such a contract was the chief executive. Next in order were chief financial officers, program directors and development directors.
In those contracts, the most common element was the starting salary, with cars the next most common contractual benefit, albeit much further down the list. Also common contract elements were stipulated salary increases, severance pay and expense allowances.
Of those organizations that did not offer contracts, 30.8 percent indicated they would offer one if the new chief executive requested it. Another 20.4 percent indicated they wouldn't, with the rest - nearly half - reporting they did not know.
By far, raises were most commonly offered annually, though nearly 5 percent reported that they did not give top executives raises until more than two years of service.
Breaking salary increase policies down to "general," "merit" and both, organizations tended to use both reasons as their policy (46.9 percent), while "general" received 26.9 percent and "merit" 26.2 percent.
A strong majority of organizations (72 percent) reported their hourly and salaried "non-exempt" staff received similar increases to the exempt, salaried staff. Only 6.5 percent reported their exempt pay was increasing faster (by an average of 4.5 percent). Another 16.5 percent of organizations reported their non-exempt pay was increasing more quickly, at an average of 7.8 percent.
Health insurance premiums have become a consistent concern for organizations trying to control costs. Most organizations (90.6 percent) reported their employee health care premiums raised in 2001, with the average increase at 17.1 percent, though the most common increase was 10 percent.
The most common way of paying that increase was for the organization to pick up the cost. In those organizations that indicated the employees would be paying a greater share of the cost, however, the average increase was 27.7 percent, according to the data. Other organizations tended to shop their policies around for lower premiums or make changes in benefit levels.
The largest category of organizations was human service/social/welfare groups (47.6 percent of respondents). The next most common organization types were education and health. The fourth most common category was "other," which included some environmental organizations, and many others that did not indicate a specific category. Also included in the survey were religious groups, government organizations, associations, civic groups, cultural organizations, and foundations.
Benefits and innovations
Maintaining benefits for employees - particularly health care coverage - are among the largest concerns for nonprofit executives. Al Brislain, executive director at the Second Harvest Food Bank of the Inland Northwest in Spokane, Wash., said that having a strong benefits package is "the least we can do." But, it's getting harder to keep from passing along some of the costs. "Right now we charge for dependent coverage a flat $50 a month," he said, noting that benefits costs overall have been skyrocketing in recent years. "We did pick (the increases) up this year. However, we did tell people we don't know how much longer we'll be able to do that."
He said he believes benefits packages are being eroded at a lot of nonprofits. "We are able to (stay away from a deductible) as long as people stay out of the hospital," Brislain said. "For doctor visits and urgent care, there's a co-pay." But for employees with children, an emergency room visit can be par for the course.
Brislain said the organization offers employees a three-for-one trade of accrued sick days. "After people have accrued 300 hours of sick pay (which takes a couple years to accumulate), anything over that they can trade three for one for vacation."
It makes perfect sense that the Montrose Counseling Center brings in a stress therapist once a month. "We're a mental health clinic," said Ann Robison, executive director of the Houston-based agency. "We bring in an outside therapist. They can talk about whatever they want."
The voluntary group began about 20 years ago, when many patients with HIV started using the center's services. In addition to HIV patients, the counselors also deal with people who've been victims of domestic abuse and assaults. "They hear a lot of pain from their clients," Robison said.
Of the 60 employees, roughly 10 to 15 attend the monthly meetings, which generally do not include supervisors, to allow the employees to vent about on-the-job stresses to a therapist, who has no other association with the agency.
While Robison indicated the organization's health insurance premiums were only going up 2 percent, she is nervous she won't be as fortunate going into 2003. "We're a United Way agency," she said. "They couldn't afford to (cover the agency's health premium) another year."
Pious Thomas, fiscal director of the Violence Intervention Program in New York City, said the organization's health insurance premiums have increased 10-12 percent a year for the past few years, and this year the family coverage increased 32 percent compared to last year. "We don't get any kind of bargain," he said, "because we have less than 50 employees."
The organization also provides employees dental and vision coverage at an annual expense of about $9,000, Thomas said. "A lot of people wanted it."
Alice Kinsler, executive director of the Hospice Foundation for the Central Coast in Monterey, Calif., said the organization has turned to partial self-insurance with a third-party administrator to keep health costs down. A year ago the organization's health insurer was going to bump costs up again, she explained, and she was faced with a difficult decision. "We saved about $20,000," she said. "It's cheaper and simple because it's the employee taking responsibility."
Bill Pfeifer, president and CEO at the American Lung Association of Arizona/New Mexico, based in Phoenix, said all staff members who've worked there at least one year receive a $300 expense account for the year to cover any self-paid medical related coverage - a term he keeps rather lenient. "If they want to pay for a pair of glasses, upgrade those frames, they can do that," he said. "I've had staff members use it for health club memberships or a day at the spa."
The health costs got so rough for some youth service organizations in Oklahoma that they pitched together to start a self-insured plan with the new year. Glenn Bracken, executive director of Payne County Youth Services in Stillwater, Okla., said not only will pooling the resources of six other local youth organizations enable them to reduce premiums, it'll also let him offer better benefits.
"Currently, we're not able to offer dental," he said when interviewed before the end of 2001. "Under this plan it'll be part of the company-paid plan."
He said his premiums personally would drop $50 per month. "It's better coverage for less money," he said, though it carries the risk of having to hire an administrator who manages the program.
Nancy Harrington, who runs the Montgomery County United Way Service Center in The Woodlands, Texas, said the organization covered a large health coverage increase of 69 percent.
"Basically you're talking about a whole body -- 20-30,000 in insurance," she said. "It meant a position we were meaning to implement we weren't able to implement. It impacts on staffing."
Potentially impacting on salaries will be the bankruptcy of Enron in nearby Houston. "We're going to be analyzing our salary and wage scale," she said. But the economy won't hit one of the organization's employee benefits. Each employee gets a gift certificate that can be used in a resale shop it runs as a fundraising effort.
"We're in an affluent community. We get incredible donations," Harrington said. "It doesn't actually cost us money, nor does it raise their taxable income."
Some other innovative benefits organizations noted include:
o Domestic partner coverage;
o Membership at YMCA;
o Five hours per month to visit child's school;
o Spanish classes, weight loss group, and dry-cleaning pickup (same organization);
o Reduced tuition at a local university;
o Subsidies for health clubs;
o AAA and "Sam's Club" memberships;
o Birthday off;
o Concierge service;
o Cell phones.
Along with some more standard "innovative" benefits, such as flexible schedules and personal days, the little things can mean a lot to those who make their careers in the nonprofit sector